MOTORING TRADE CRISIS.

Taranaki Daily News, 12 June 1920, Page 10

MOTORING TRADE CRISIS.

MANY FIRMS GOItfG UNDER. London, May 3. The crisis in the motor car industry is beginning. Good judges are nervous that It may develop into a serious crash and that a largo number of manufacturers may be involved. A warning was uttered in the Dally Express some months ago against the methods of certain makers who, with not too strong a financial back-

ing, promised laige production and took deposits against orders for the public. One concern has already fallen by the wayside, and depositors stand little chance of regaining their money. ''Nearly twenty makers that I could nami' are in difficulties," said one of the leading agents in the trade to a Daily Express representative. "Some are even on the point of bankruptcy. They are mainly firms which rushed into the'business hoping for another motor boom. They have taken orders and have not been able to fulfil them. Each week money has been going out for machinery, material, wages, and general upkeep costs, and nothing has been coming in. There is only one end t)o such a position and it is clear. These firms have spent both their capital and their money received in deposits, and they are now trying vainly to find a way out. They, have been laid up for parts, which would have meant tho completion of motor cars and a consequent revenue. All their optimistic plans have gone wrong and t'hey are in desperate straits. Even some of the larger concerns are not in the best position. They have talked of mass production without understanding what it really Implies. The necessary Organisation has occupied much longer than wus expected. A stream of money has been poured out, but not a corresponding floV of cars. People who know expect many collapses and heavy looses. The whole industry will suffer, and the public as well. A firm which exhibited a motor I car Which was generally praised is now in the hands of a receiver. They were particularly unlucky, because the engine they had was really good. Two other factories have recently closed down." General fears concerning the industry have been reflected on the Stock Exchange. Some recent capital issues have been seriously under-subscribed.